HMSA joins settlement of unfair-payment suit

900,000 doctors sued managed care firms over what they called systematic cheating

The Hawaii Medical Service Association and other managed health care companies across the nation have agreed to a $128 million settlement in a class-action lawsuit by 900,000 doctors over alleged unfair payment practices.

Under the settlement, 23 Blue Cross and Blue Shield Plans, including HMSA, and the Blue Cross and Blue Shield Association will put money into a fund from which a doctor can make a claim or pick a charity to get the money.

HMSA Senior Vice President Cliff Cisco said he does not know the exact amount HMSA must pay to its physician-members in the case, but that it represents less than 2 percent of the $128 million figure.

The lawsuit, Love v. Blue Cross Blue Shield Association, was filed in Miami and named many plans "as co-conspirators." The doctors alleged they were systematically cheated by insurance companies that programmed computers to pay for less intensive services than were actually provided. Medical societies, such as the Hawaii Medical Association, joined doctors in the action.

"This agreement forces health insurers to play fair with physicians and the patients they insure," said HMA President Linda Rasmussen. "Hawaii physicians have waged battles with HMSA for decades over unfair business practices and to obtain medical treatment their patients need."

Cisco said, "We welcome the settlement so we can get this issue behind us."

Business practice changes are expected to raise the estimated value of the entire settlement to more than $1 billion, according to HMA.

"I don't think individual physicians are going to get much, but if they (HMSA) would remedy their conduct, that would be a real benefit," said Arlene Jouxson-Meyers, a Honolulu pediatrician and lawyer who heads the Hawaii Coalition for Health. "The jury is still out on whether that will happen."

The coalition, an advocacy organization, also has cases pending against HMSA "on the same conduct -- various methods of unfair claims processing, down-coding and a whole gamut of stuff they've chosen to settle," said Jouxson-Meyers.

Cisco said HMSA has been working with physicians the last several years addressing many business practice issues. HMSA is setting up physician advisory committees and working on medical necessity determinations and "systems changes which will allow more access to information," he said.

Rasmussen said that not only are insurance reimbursements lower than the doctors' costs, but it is also a hassle getting them from the insurer.

"They say they lost them (claims) or you didn't dot one 'i' or cross one 't.' It's a constant thing. They want one thing done one time, then switch it. ... They fight us on so many things.

"The work involved in filing the paperwork required doesn't make up for the pittance you get paid," she added. "That is so frustrating for physicians -- that's the side the public really doesn't see."

SETTLEMENT PRESCRIBES CHANGES

Blue Cross/Blue Shield Association health plans, including the Hawaii Medical Service Association, must make these business practice changes under a settlement with about 900,000 physician-members and medical societies: